Indefinite shutdown of JX Nippon's propylene unit, naphtha cracker runs unaffected

09-Oct-15

Japan's JX Nippon Oil & Energy Corp said on Thursday it had shut a 140,000 tpa propylene-making unit at its Kawasaki plant for an indefinite period due to bad margins, as per Reuters. The propylene unit, which uses olefins conversion technology and feed on ethylene and butene, was shut on Monday, a company spokesman said. But JX Nippon Oil & Energy will keep its naphtha cracker running at high rates. Traders said a string of new propane dehydrogenation (PDH) plants springing up in China and South Korea have created an oversupply of propylene, a building block for plastics. "Propylene is not doing well due to oversupply. In the last 12 months, we were seeing on-purpose propylene plants coming onstream," said a Singapore-based trader. Naphtha cracking margins on the other hand are healthy, traders said, as crackers produce a diversified range of petrochemical products including propylene, butadiene, but with the bulk of it being ethylene, also a building block for plastics. "Ethylene is holding up, thanks to demand," said another trader but based in North Asia.